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55 Economic Indicator #2: Profitability With significantly higher proportion of businesses reporting decreased Profitability at 39.1% vs. 53.6% in 2012, and significantly lower proportion of businesses reporting increased Profitability in at 41.2 % vs. 30.6% in 2012, the performance in 2013 was worse than the spectacular performance in 2012.

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66 Economic Indicator #3: Total Operating Cost as a % of Revenue More than half of the businesses reported increased Operating Cost.

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77 Economic Indicator #4: Capital Expenditures Though overall, businesses did not report a significant change in their Capital Expenditures from last year, the percent of businesses reporting decreases in Capital Expenditures kept going down and the percent of businesses reporting increases in Capital Expenditures also slightly went down in 2013 after touching the peak since 2008.

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88 Economic Indicator #5: Number of Employees Headcount remained fairly stable for 2013 as it did in last many years, with almost 61% of the businesses reporting no change in Number of Employees in saw almost 35% businesses increasing Number of Employees, the proportion was significantly lower at just 23% in 2013.

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was a year of new realizations:  Economic growth is below potential Slowest post-war recovery on record Global slump  Government problems are far from over Deficit Debt Sequester  ACA is here (sort of) and nobody knows what it means Summary of Findings – 2013

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10 Looking Forward: 2014 Expectations Performance compared to expectations in 2014 was not as optimistic as it was in The percentage of businesses which performed beyond expectation went significantly down from 27.5% to 19.9%. Though not significant, the percent of businesses which performed below expectations rose from 32% to 39.4%.

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13 Economic Predictor #4: Capital Expenditures A significant decline in the proportion of businesses projecting increase in Capital Expenditure for 2014 was noted at 38% vs. 46% last year. The proportion of businesses projecting unchanged Capital Expenditure went up significantly for 2014 at 49.6% vs. 40% for 2013, suggesting less polarized results in 2014.

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14 Economic Predictor #5: Number of Employees Compared to 43% projected for 2013, only 26% of businesses are expecting Number of Employees to increase in 2014, which is the lowest projection since Only 9% expect to decrease the number of employees next year.

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15 Contributions: Actions to Improve Company Performance The majority of businesses in Northeast region that responded to this question reported Improved Internal Efficiencies (52.7%), Increased Sales Efforts (47.9%) and Increased Marketing Efforts (42.8%) as the top three reasons for Improved Performance.

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16 Expectations have dropped for JUSTIFIED ? Three times smitten – get a complex Realistic based on the economic outlook

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33 HE SAID, LOVE, THEY’RE JACKING UP WAGES EVERYWHERE The minimum wage will increase in 10 states on January 1, Employers to be more generous with pay raises next year, CNNMoney. An improving job market is boosting wages, Herald and News. SHRM consensus is for an average budget increase of 3 percent. Hay Group says 3 percent salary increases in 2013.

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46 Broad sample of business community; not cherry picked Self assessment by optimistic groups Two surveys in one: –Actual for 2013 –Projection for 2014 Survey instrument not meant to measure previous year’s projections to current year actual results Value of statistically significance changes Interpreting the Results

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47 Economic Indicator #6: Overall Wage Change The proportion of businesses projecting same wage level for 2014 is significantly higher at 43.77% vs % for 2013, indicating less polarization in Not surprisingly, the proportion of businesses projecting high wage level in 2014 is significantly down from 67% last year to 51.46%.

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48 Economic Indicator #7: Change in Pricing Projections for 2014 are in line with what was projected for For 2014, 55.3% of businesses are projecting price hike, which is almost equal to the projection made for Most of the businesses are reporting either no change or slight increase in Prices.